Narrative Opinion Summary
This case involves a class action and individual claims related to securities violations by Vivendi Universal, S.A. The Individual Plaintiffs, excluded from the original class, pursued claims under Sections 10(b) and 20(a) of the Securities Exchange Act and Sections 11, 12(a)(2), and 15 of the Securities Act, alleging fraudulent misstatements by Vivendi that inflated its securities. Following the Supreme Court's Morrison v. National Australia Bank Ltd. decision, which limits Section 10(b) to domestic transactions, the Court previously dismissed similar claims in a related class action. The Defendants moved for partial judgment on the pleadings to dismiss the Individual Plaintiffs' claims concerning Vivendi's ordinary shares traded on a foreign exchange. The Court granted this motion, adhering to Morrison's precedent, while claims involving American Depository Shares on the New York Stock Exchange remain. The Court deferred Rule 11(b) compliance findings, as the case has not reached final adjudication. Despite the Defendants seeking costs, the ruling focuses on the extraterritorial limitations of the Securities and Exchange Acts, dismissing foreign-traded securities claims but allowing those involving domestic transactions to proceed.
Legal Issues Addressed
Application of Morrison v. National Australia Bank Ltd.subscribe to see similar legal issues
Application: The Morrison ruling limits the applicability of Section 10(b) of the Securities Exchange Act to securities listed on American exchanges or sold within the U.S., leading to the dismissal of claims related to Vivendi ordinary shares traded on a foreign exchange.
Reasoning: The Court decides to dismiss the Individual Plaintiffs’ Exchange Act claims, having previously rejected similar arguments in Vivendi II and finding no new legal basis for reconsideration.
Continued Claims under Securities Act for American Depository Sharessubscribe to see similar legal issues
Application: Claims related to American Depository Shares traded on the New York Stock Exchange are not dismissed and remain active.
Reasoning: The Court dismissed only the Individual Plaintiffs’ Ordinary Share Claims, while their claims related to American Depository Shares (ADS) traded on the New York Stock Exchange remain active.
Controlling-Person Liability under Section 20(a) of the Exchange Actsubscribe to see similar legal issues
Application: Claims under Section 20(a) require a primary violation, control over the violator, and culpable participation, failing which the claim cannot succeed.
Reasoning: Failure to adequately allege a primary violation prevents a successful Section 20(a) claim.
Rule 12(c) Motion for Judgment on the Pleadingssubscribe to see similar legal issues
Application: The Court applies Rule 12(c) in parallel with Rule 12(b)(6), accepting the allegations in the complaint as true and dismissing claims only when no facts could support a claim for relief.
Reasoning: The legal framework for evaluating a Rule 12(c) motion for judgment on the pleadings parallels that of a Rule 12(b)(6) motion, requiring the Court to accept the allegations in the complaint as true and to dismiss only if it is clear that no facts could support a claim for relief.
Securities Act's Extraterritorial Limitationssubscribe to see similar legal issues
Application: The Court dismisses Securities Act claims involving foreign transactions, aligning with the Morrison decision, which precludes extraterritorial application.
Reasoning: Morrison established a presumption against extraterritoriality for federal legislation, concluding that neither statute applies to sales outside the U.S.